Politicians who once benefited from FTX’s large donations are hard-pressed to pay back.
After Sam Bankman-Fried donated tens of millions of dollars to politicians throughout the 2022 midterm election cycle, the thirty-something’s former company is asking for its money back.
Recipients of bankruptcy purse contributions must repay the funds by February 28, 2023.
Political return
As FTX Group announced in a press release on Sunday, the exchange and its affiliated borrowers are sending confidential letters to recipients of the company’s past political contributions.
These include political figures and political action funds that received payments “at the direction of the FTX Debtors, Samuel Bankman-Fried or other officers or directors of the FTX Debtors.”
The statement follows FTX’s announcement in December that it would set up arrangements for recipients of the funds to voluntarily return their money. If the related parties refuse to pay it back, they could be forced to do so by the Bankruptcy Court, with interest accrued on what they owe once legal action is initiated.
The process could involve returning up to $93 million to the stock market, an amount that debtors estimate is equivalent to FTX’s contributions to policymakers. According to CoinDesk, at least 196 members of Congress have received donations from the exchange giant, including House Speaker Kevin McCarthy (R-Calif.) and Senate Majority Leader Chuck Schumer (D-Calif.). from New York).
Many suspected that Bankman-Fried’s political donations went mainly to Democrats, but the former billionaire claims to have sent roughly the same amount to Republicans as well. However, fearing a public backlash, he said he was keeping his right-wing funding out of the public eye.
Bankman-Fried’s ties to Washington
Bankman-Fried was known for maintaining close ties to both the Securities and Exchange Commission (SEC) and the Commodity and Futures Trading Commission (CFTC), two regulators that battle for influence over cryptocurrencies as an emerging asset class. .
House Republican Tom Emmer claimed in November that he was trying to influence the SEC to grant his exchange special regulatory privileges over other exchanges. Earlier in November, Binance CEO Changpeng Zhao made a similar statement on Twitter, days before FTX fell apart.
Terry Duffy -CEO of the Chicago Mercantile Exchange- has pointed out that Bankman-Fried maintained a suspicious closeness with politicians, who were especially hostile to criticism of the former CEO.
FTX’s leadership has been indicted on multiple counts of fraud for misappropriating user funds for the wrong purposes, such as operations at Alameda Research.
